This week, Julian Keith, partner in housing and regeneration at Trowers & Hamlins, delves into the current challenges involved with student accommodation and asks whether this type of housing can be seen as a stepping stone to other forms of home occupation.
In an article for Practice & Law, he looks at regulation issues, affordability and the interplay of student lets with other types of tenure, outlining the key considerations providers and investors should bear in mind when it comes to student accommodation.
Keith writes: “In terms of deals, last year saw a huge amount of movement in the sector, with Savills reporting that over 74,000 beds were traded at a total value of £5.9bn. Construction continues, albeit with the usual challenges of land value, construction costs and affordability concerns, which is where the similarities with build-to-rent stock begin.
“Students using purpose build student accommodation (PBSA) are becoming more accustomed to convenience, high specifications (albeit perhaps not in space) and additional services and amenities available to them. The point is the “players” need to be sensitive to these changes in attitudes and look to opportunities and possibilities in the market.”
Dealing with the growing problem of affordability, he adds: “We are starting to see the economic effect of large numbers of students leaving many thousands of pounds in debt – very few can afford to get on the housing ladder or are simply struggling to rent accommodation. There may be an opportunity in weaving the tenure types together to create some mobility between them and those involved making savings by using synergies in the way in which properties are built and managed.”
Student accommodation: new lessons to learn
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